Getting Down To Shinjitsu

January 04, 1985

There is a Japanese word, shinjitsu, which means truth. There is another Japanese word, hanasu, meaning talk. In their California summit conference, President Reagan and Japanese Prime Minister Yasuhiro Nakasone have just engaged in hanasu.

Administration officials were bowled over. An amazingly conciliatory and eminently cooperative Mr. Nakasone said he would increase his nation`s defense spending by 7 percent this year and would make an all-out effort to reverse his nation`s trade imbalance with the United States.

Hanasu can sound terrific, but it deserves a couple of looks.

Japanese defense spending, according to the International Institute for Strategic Studies, is now $11.6 billion, a little less than 1 percent of Japan`s gross national product of $1.2 trillion. The U.S. is spending some 7 percent of GNP on defense. Japan has a way to go on defense.

It has a longer way to go on free trade. For all its global operations, Japan remains one of the most insular and protectionist nations on trade. Mr. Nakasone is doubtless terrified about what might happen to his economy if the U.S. became even half as protectionist as Japan. As it is, Japan accounts for $35 billion of the record U.S. trade deficit--about one-third the total. Its voluntary auto quotas resulted in roughly the same amount of Japanese cars being sold in the U.S. for substantially more money--just the sort of thing Teddy Roosevelt and other trustbusters were fighting nearly a century ago.

It`s been argued that, even if Japan were to drop all trade barriers, it would still have a big edge because its products are so popular. That`s fine. As always, American industry must stand or fall on its competitive ability. Let`s just see some more Chevrolets, IBM computers and RCA video equipment in Japanese showrooms. Then we shall get down to shinjitsu.